Scentre’s earnings soar

SCENTRE, the owner of Westfield shopping centres in Australia, has chalked up a spike in first-half earnings as the value of its properties surges.

The retail landlord yesterday posted a net profit of $1.4 billion for the six months to June – up 22 per cent on the same period a year earlier.

And it said it was expecting further improvement in the six months to December on an underlying basis, which strips out the effect of one-off items.

The surge in net profit over the past six months came as the value of its properties increased by $929 million.

That was driven by the completion of the redevelopment of Westfield Chermside in Brisbane and improved operating income due to rent increases. Funds from operations – effectively income excluding changes in property values – rose a far more modest 3.5 per cent to $638 million.

Scentre owns 39 Westfield shopping centres in Australia and New Zealand and says its portfolio is more than 99.5 per cent leased.

Chief executive Peter Allen said there was strong sales growth in food, dining and technology at Westfield centres during the first half.

Specialty sales were up 1.5 per cent from a year earlier on a like-for-like basis, which sets aside the impact of shops that have opened or closed.

“The portfolio’s high specialty sales productivity ensures strong demand from retailers wanting to generate growth in sales and customer engagement,” Mr Allen said.

The group has reaffirmed its forecast for funds from operations to grow about 4.25 per cent for the full year. Scentre started $900 million worth of development projects in the first half, including upgrades of Westfield Carousel in Perth, Plenty Valley in Melbourne and construction of a centre at Coomera on the Gold Coast.

The group is paying an interim dividend of 10.86c for each of its securities, up 0.21c on a year ago.

Scentre securities closed 1.5 per cent lower at $3.93.